Concessions and Leases in the Lao PDR

ventures in eucalyptus are the largest. Similar to the
agriculture subsector, the dominance of very few products
(rubber and eucalyptus make up almost three quarters of the
area of all forestry concessions) can lead to a considerable dependency
on global markets. This is especially relevant with
rubber, which is a highly globalized product with price fluctuations
closely linked to oil prices. In terms of average area,
the five investment deals in acacia average an astounding
7,994 ha (two Chinese acacia projects included in this average
are both nearly 20,000 ha in size), followed by eucalyptus and
rubber deals which are on average 2,042 ha and 609 ha in
size respectively (see Table 8). Eucalyptus is typically planted
on flat areas, which allows for large-scale planting, whereas
rubber can be grown also on sloping land limiting the size
of individual plots.
59% of land deals in the forestry subsector are under foreign
investment and 35% domestic investment, with only 6% joint
ventures (see Map 8). In terms of area, foreign investment
covers the most land, constituting 79% of areas under forestry
investment, domestic only 11%, and JV 10% of the overall
area devoted to forestry projects.
Of all foreign investor countries, China leads in the forestry
sector with 86 projects, ahead of Vietnam (50), Thailand (38)
and South Korea (16) (see Figure 12 and Table 9). In terms of
area under investment, China also has the largest total area
(86,861 ha), followed by Vietnam (62,840 ha), India with just
seven concessions but whose total area comes to a sizeable
54,178 ha and Thai Investment only covers an area of 19,324
ha.
The area under Vietnamese investment in rubber is far larger
than rubber areas under any other investor, although a high
volume of Chinese investment in rubber exists under land
arrangements outside of concessions and leases, and is
therefore (as mentioned above) not included here. Chinese
investors are the dominant investors in rubber in the North,
attributable to the ease of transport of raw rubber from the
North to purchasers and processing plants in Chinese
Xishuangbanna (the region bordering Northern Lao PDR).
Chinese rubber investment projects are also only 341 ha on
average, whereas Vietnamese rubber investments average
1,477 ha in size (see Table 9).
Most forestry projects are located in Central Lao PDR (49%)
and the South (32%), while far fewer are found in the North
(19%) (see Figure 14 and Map 8). Area-wise, only 10% of
forestry investment projects occur in the North, most of
them under Chinese and domestic investment. 66% of the
total area under investment in forestry is in the South,
including most of all Thai tree plantations and the majority
of Vietnamese tree plantations. Of the area under investment
in forestry in the South, a large portion is under rubber
production as the largest rubber concessions in the country
are located in that region. Domestic investment is mainly concentrated
in the Central region.
Rubber Plantation, Hinheub District, Vientiane Province
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